[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-29853] [[Page Unknown]] [Federal Register: December 5, 1994] ======================================================================= ----------------------------------------------------------------------- COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 30 Foreign Option Transactions AGENCY: Commodity Futures Trading Commission. ACTION: Order. ----------------------------------------------------------------------- SUMMARY: The Commodity Futures Trading Commission (``Commission'') is authorizing option contracts on the LME Aluminum Alloy Futures Contract traded on the London Metal Exchange (``LME'') to be offered or sold to persons located in the United States. This Order is issued pursuant to: (1) Commission rule 30.3(a), 17 CFR 30.3(a) (1994), which makes it unlawful for any person to engage in the offer or sale of a foreign option product until the Commission, by order, authorizes such foreign option to be offered or sold in the United States; and (2) the Commission's Order issued on August 18, 1992, 57 FR 38437 (August 25, 1992), authorizing certain option products traded on the LME to be offered or sold in the United States. EFFECTIVE DATE: January 4, 1995. FOR FURTHER INFORMATION CONTACT: Francey L. Youngberg, Esq., Division of Trading and Markets, Commodity Futures Trading Commission, 2033 K Street NW., Washington, D.C. 20581. Telephone: (202) 254-8955. SUPPLEMENTARY INFORMATION: The Commission has issued the following Order: Order Under Commission Rule 30.3(a) Permitting Option Contracts on the LME Aluminum Alloy Futures Contract Traded on the London Metal Exchange To Be Offered or Sold in the United States Thirty Days After Publication of this Notice in the Federal Register Absent Further Notice By Order issued on August 18, 1992 (``Initial Order''), the Commission authorized, pursuant to Commission rule 30.3(a),\1\ certain option products traded on the London Metal Exchange to be offered or sold in the United States. 57 FR 38437 (August 25, 1992). Among other conditions, the Initial Order specified that: \1\Commission rule 30.3(a), 17 CFR 30.3(a) (1994), makes it unlawful for any person to engage in the offer or sale of a foreign option product until the Commission, by order, authorizes such foreign option to be offered or sold in the United States. --------------------------------------------------------------------------- Except as otherwise permitted under the Commodity Exchange Act and regulations thereunder, * * * no offer or sale of any London Metal Exchange option product in the United States shall be made until thirty days after publication in the Federal Register of notice specifying the particular option(s) to be offered or sold pursuant to this Order. By letter dated October 31, 1994 the London Metal Exchange (``LME) represented that it would be introducing an option contract based on the LME Aluminum Alloy Futures Contract. The LME has requested that the Commission supplement its Initial Order authorizing Option Contracts on High Grade Primary Aluminum, Copper-Grade A, Special High Grade Zinc, Standard Lead, Primary Nickel and Tin futures contracts, 57 FR 38437 (Aug. 25, 1992), by also authorizing the Option Contract on the LME Aluminum Alloy Futures Contract to be offered or sold to persons in the United States. Upon due consideration, and for the reasons previously discussed in the initial Order, the Commission believes that the request for authorization to offer or sell an option contract on the LME Aluminum Alloy Futures Contract should be granted. Accordingly, pursuant to Commission rule 30.3(a) and the Commission's Initial Order issued on August 18, 1992, and subject to the terms and conditions specified therein, the Commission hereby authorizes the Option Contract on the LME Aluminum Alloy Futures Contract to be offered or sold to persons located in the United States thirty days after publication of this notice in the Federal Register, unless prior to that date the Commission receives any comments which may result in a determination to delay the effective date of the Order pending review of such comments. Under such circumstances, the Commission will provide notice. LME Aluminum Alloy Options Contract Unit of Trading--1 Option to buy (or sell) 1 LME Aluminum Alloy Futures contract with a price denominated in either US Dollars (USD) or Pounds Sterling (STG) or German Marks (DEM) or Japanese Yen (YEN). Delivery/Expiry Month--Every month up to 15 months forward, except for DEM and YEN if Delivery day is non-business for that currency. Exercise Day/Delivery Day/Expiry Day--Exercise by 11:10 a.m. of 1st Wednesday of the Delivery month. Assignment of Futures contract is by 11:40 a.m. on the Exercise day. Options not exercised automatically expire. Quotations--In each of the currencies specified. Minimum Price Movements for Premiums-- USD OPTIONS US 0.01 STG OPTIONS STG 0.01 DEM OPTIONS DEM 0.01 YEN OPTIONS YEN 10 Trading Hours--11:45-11:50, 13:05-13:10, 13:15-13:30, 15:50-15:55, 16:30-16-35 and 16:35-17:00 for Ring trading or any time on the telephone market. Contract Standard--Assignment of 1 LME Aluminum Alloy Futures contract of 20 tonnes with a delivery on the 3rd Wednesdays of the Delivery month at the Exercise Price. Exercise Price Intervals (Gradations)-- US Dollars --US$25 gradations for Strikes from US$25 to US$1725 --US$50 gradations for Strikes from US$1725 to US$2950 --US$100 gradations for all Strikes over US$3000 Pounds Sterling--STG25 gradations for all Strikes over STG25 Japanese Yen --JY10,000 gradations for Strikes from JY10,000 to JY390,000 --JY20,000 gradations for all Strikes over JY400,000 Deutschmarks --DEM50 gradations for Strikes from DEM50 to DEM4950 --DEM200 gradations for all Strikes over DEM5000. Option Price (Premium)--The option price is payable by the buyer to the seller on the next Business Day following the day on which the Option is traded. List of Subjects in 17 CFR Part 30 Commodity futures, Commodity options, Foreign transactions. Accordingly, 17 CFR Part 30 is amended as set forth below: PART 30--FOREIGN FUTURES AND FOREIGN OPTION TRANSACTIONS 1. The authority citation for Part 30 continues to read as follows: Authority: Secs. 2(a)(1)(A), 4, 4c, and 8a of the Commodity Exchange Act, 7 U.S.C. 2, 6, 6c and 12a. 2. Appendix B to Part 30 is amended by adding the following entry after the existing entries for the ``London Metal Exchange'' to read as follows: Appendix B--Option Contracts Permitted To Be Offered or Sold in the U.S. Pursuant to Sec. 30.3(a) ------------------------------------------------------------------------ Exchange Type of contract FR date and citation ------------------------------------------------------------------------ ***** London Metal Exchange.. Options on the LME December 5, 1994; 59 Aluminum Alloy Future FR ____ Contract. ***** ------------------------------------------------------------------------ Issued in Washington, D.C. on November 29, 1994. Jean A. Webb, Secretary to the Commission. FR Doc. 94-29853 Filed 12-2-94; 8:45 am] BILLING CODE 6351-01-M
